Load shedding and your insurance

One of these implications is how load shedding affects citizen’s and their property’s safety and security. After a spate of burglaries recently in Florida Park that took place during load shedding the question now is also raised whether insurance will pay claims of this nature or when appliances are damaged during load shedding.

One of the Record’s online sister publications, Moneyweb, recently published an article on this issue after speaking to a variety of stakeholders in the insurance industry.

According to Genesis CEO, Tim Lazarus, criminals love load shedding. Criminals know that most security systems run on electricity and battery back-ups generally last only a few hours, and therefor plan their break-ins during power outages.

MUA Insurance Acceptance’ managing director Christelle Fourie explained that “loss from power surges and theft as a result of load shedding were not risks that insurance companies had priced for. Insurance for these events would either become very expensive or they would simply become uninsurable since the exposures were too big”. According to Fourie MUA would judge each claim of this nature on its own merit.

Outsurance’s stance on the issue is that it does not get “technical” when it comes to paying out claims where the client had no control over the incident.

Edite Teixeira-Mckinon, the deputy Ombudsman for Short-term Insurance (OSTI), told Moneyweb “where it was beyond the control of the policyholder – for instance, in periods of extended load shedding when back-up batteries run flat even though the alarm was fully functional – the OSTI would judge the facts in terms of its equity jurisdiction. This allows the technical stipulations of a policy to be overridden by sound insurance practice, to the benefit of policyholders.”

Readers are advised to query this with their respective insurance companies.

This article was adapted from a Moneyweb article.